The Globe and Mail’s article yesterday on the Alberta Court of Appeal decision in Yugraneft Corp. v. Rexx Management Corp. left me wondering. In Yugraneft, the Court held that an application to register and enforce a foreign arbitral award under the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (a.k.a. the New York Convention) is subject to the ordinary limitation period of two years.
The decision has indeed been the source of much concern among Canadian arbitration practitioners; even the decision by the Court of Queen’s Bench in 2007 created quite a stir. My own sense from speaking to colleagues is that most, if not all, of the arbitration bar agrees that the decision is terrible policy.
But saying a decision is terrible policy is not the same as saying that it is bad law. The tone of the article suggests that errant courts have led our law astray, and it is now up to the Supreme Court to set things right, assuming it grants leave. But why should it be the job of the courts to ameliorate perceived defects in the law? The Alberta legislature established a common limitation period in its Limitations Act, without expressly excepting enforcement of foreign arbitral awards or most foreign judgments. While a longer period for enforcing foreign awards is in my view a good idea – and indeed the Alberta Law Reform Institute has recently recommended that the limitation period for enforcing all foreign judgments and awards be extended to ten years – is this not, ultimately, a legislative choice?
Arguably, the Alberta Act was insufficiently clear on this point, and in the absence of legislative guidance, there was room for the court to read the law more flexibly. Yet consider Ontario’s Limitations Act, which also imposes a largely uniform two year limitation period for bringing an action. Not only does Ontario’s Limitations Act lack any express exception for foreign arbitral awards, it specifically provides that enforcement of domestic arbitral awards under the Ontario Arbitration Act is not subject to any limitation period at all. In view of the (apparent) deliberate omission of any exception for foreign awards, what should a court make of the Ontario Act?
If this decision does, as the Globe says, harm Canada’s image as an arbitration-friendly jurisdiction, then I think we should be turning our energies to lobbying for legislative change. The deficiencies in Canada’s implementation of the New York Convention aren’t limited to just one province, and nothing the Supreme Court can say is likely to change that.